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If you’ve applied for federal student loans in the past, chances are you’re familiar with the Expected Family Contribution, or EFC — a number used by colleges to figure out how much financial aid students are eligible for.
Starting in the 2024-2025 school year, the EFC was replaced by the Student Aid Index, or SAI. It fulfills the same basic purpose but works a little differently, which we’ll discuss in-depth below.
This change was part of the larger FAFSA® Simplification Act, which itself was part of the larger Consolidated Appropriations Act passed in December 2020. Here’s some helpful information about the Student Aid Index.
Key Points
• The Student Aid Index (SAI) replaced the Expected Family Contribution (EFC) in the 2024-2025 school year, aiming to simplify the federal aid application process.
• Unlike the EFC, the SAI can have a negative value, potentially increasing the amount of aid for which students are eligible.
• The SAI calculation considers a family’s financial assets and income to determine a student’s financial need, influencing eligibility for Pell Grants and other federal aid.
• The SAI also allows financial aid administrators more flexibility to adjust aid amounts based on a student’s or family’s unique circumstances.
How Does the Student Aid Index Work?
The Student Aid Index replaced the EFC and uses a distinct and updated calculation. The SAI assesses a family’s available financial resources, including income, assets, and household size, to determine the student’s financial need. This is expressed as a number ranging from -1,500 to 999,999. The negative numbers identify students with the highest need.
The SAI figure is subtracted from the cost of attendance to determine how much federal need-based college financial aid a student is eligible for. This includes Pell Grants, Direct Subsidized Loans, and federal work-study. Financial aid administrators can make case-by-case adjustments to students’ financial aid calculations under special circumstances, such as a major recent change in income.
The SAI is not a factor in qualifying for federal Direct Unsubsidized Loans or private student loans.
Pell Grant Eligibility
Pell Grant eligibility is determined primarily by a student’s SAI. Students with lower SAIs are more likely to qualify for Pell Grants, which are awarded to low-income undergraduate students to help cover educational expenses.
Eligibility also depends on factors such as enrollment status, the cost of attendance, and federal guidelines. The SAI provides a clearer, more equitable assessment of financial need for Pell Grant allocation.
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How Is the Student Aid Index Calculated?
The SAI works together with the Fostering Undergraduate Talent by Unlocking Resources for Education (FUTURE) Act to import income directly into a student’s FAFSA, simplifying the application process.
The FAFSA also automatically calculates whether or not a student’s assets need to be factored into the eligibility calculation, shortening the overall application and offering more students the opportunity to apply without having their assets considered.
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What Is a Good Student Aid Index Score?
The SAI isn’t like a test or a report card — there aren’t really good or bad scores, or scores at all. It just depends on your personal financial landscape.
The lower the SAI, the more need-based aid a student may be qualified for. Since need-based aid includes grants, which don’t need to be repaid, and subsidized loans, whose interest is covered by Uncle Sam while you’re attending school, a lower SAI may translate into a lower overall college price tag.
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How Is the Student Aid Index Used?
The SAI is used to help colleges determine a student’s financial need based on their financial demographics. Although the school itself may have its own grant programs and other types of aid, certain forms of federal student aid — such as Pell Grants and Direct Subsidized Loans — are offered based on demonstrable financial need, and the SAI is a key part of the calculation used to determine that need.
In short: the SAI is used to determine how much financial aid a student is eligible to receive.
When Did the SAI Go Into Effect?
The SAI was implemented in the 2024-2025 academic year.
The Takeaway
The Student Aid Index (SAI) is a number based on a family’s financial standing that measures a student’s financial need. The SAI is subtracted from the cost of attendance to determine how much need-based college financial aid they qualify for. The SAI factors into decisions about Pell Grants, Direct Subsidized Loans, and federal work-study. It does not factor into non-need-based scholarships and grants.
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FAQ
What is the Student Aid Index?
The Student Aid Index (SAI) is a measure used to determine a student’s eligibility for federal financial aid. It replaced the Expected Family Contribution (EFC) starting in the 2024-2025 academic year. The SAI is calculated using information about a family’s financial situation to indicate the amount of need-based aid a student may qualify for.
How is the Student Aid Index calculated?
The Student Aid Index (SAI) is calculated using financial information from the Free Application for Federal Student Aid (FAFSA), including family income, assets, and household size. The SAI can be a negative number, which helps identify students with the highest financial need.
Why was the SAI introduced?
The Student Aid Index was introduced to improve clarity and fairness in the financial aid process. By allowing for a negative value, it better reflects the financial need of students from low-income families. The change aims to make financial aid distribution more equitable and easier to understand for students and families.
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